Due to the coronavirus pandemic and related restrictions, banks were forced to transfer most of their employees to telecommuting. What turned out to be the most difficult thing in managing a bank remotely and how mobile technologies can facilitate this process – in the column of Yuliya Aniridia, Deputy General Director of the IT company Intersect Lab.
Digital maturity indicator
The current crisis has accelerated the digital restructuring of banks, and overnight shattered the conviction of many that banking and telecommuting are incompatible. In a record short period of time, banks had to carry out a massive transfer of employees to a remote mode of operation. For example, in March-April, Otkritie Bank organized remote work for about 14 thousand employees.
And although the experience of remote work was obtained by force, bankers today are increasingly talking about the advantages of remote work organization and are planning to keep it to a certain extent even after the restrictions are lifted. For example, ADB believes that after a pandemic, the largest banks can leave 20-30% of employees remotely.
It will be possible to objectively assess how economically acceptable and profitable this form of work is for business only after some time. Now, the effectiveness of organizing bank remote operations has unexpectedly become an indicator of the digital maturity of a bank.
In terms of “contactless” customer service, many banks have successfully digitized before the pandemic and transferred most of their operations to remote channels, which came in handy for self-isolation. But the massive transition to a remote mode of operation unwittingly became a test for the digital readiness of management processes and raised the question of how to transfer their key stages (planning, monitoring / control, analysis, regulation) to digital rails.
Speaking about the digitalization of management, it is necessary to single out two of its components: the digitization of data and the processes of their processing. The digitalization of management processes in this case is synonymous with automation, that is, the use of information technology (IT).
The forced retirement revealed the immaturity of management processes – something that industry experts and analysts have repeatedly warned about. Thus, according to a survey by the American Center for Productivity and Quality (APQC) and the Association of Financial Professionals (AFP), slightly more than half of the bankers they surveyed (59%) characterize the level of maturity of their financial function as average in relation to the use of tools for financial planning and analysis, and 30% – as low.
The situation in the retail business looks even more bleak. In particular, back in 2016, the consulting company BCG noted that improving pricing programs could increase the profitability of the retail business by 5-15%. But according to a survey by the American Bankers Association, only 17% of respondents said they can consolidate customer information in a single source, and according to a study by Kaufman, Hall & Associates, almost four-fifths of banks do not have tools to assess how the profitability of the client will change if new products are offered to him. The saddest picture is in liquidity and risk management. BCG estimates that only 11% of bank treasurers use digital technology extensively, and 70% have yet to master it.
What is in Russia
I believe that the situation in Russian banks is not much different from the one outlined above. It is obvious that the level of digital maturity of financial management processes in Russian banks surpasses similar indicators for business management processes, especially in retail banking, as well as liquidity and risks. This has been taken care of by finance, the main owners of financial performance management, while business leaders’ priorities in recent years have focused primarily on automating customer services.
As the analysis of information from open sources shows, corporate data warehouses used as the basis for automating most processes of financial performance management are implemented in almost every large and every second medium-sized bank.
The lowest level of digitalization is in liquidity and risk management processes. Traditionally, this block of tasks was left to the mercy of semi-manual technologies and intra-bank developments. For example, BCG experts, having paid tribute to the high level of digitization of front-office processes, believe that the weak point in Russian banks from the point of view of digitalization is still rudimentary internal banking systems, and therefore recommend that banks during a pandemic focus on digital transformation of internal processes. , including treasury and risk management.
What is missing on the remote
The processes of monitoring and control over the performance of the retail network in banks need digital modernization, showed an express survey of top managers and heads of retail divisions of banks participating in the webinar “Remote Banking: Technologies for Remote Monitoring of Retail Business”, organized by ARB. Almost a quarter of those surveyed reported that they lack independent access to reports in 24×7 mode, and 18.5% – auto notifications about critical changes in business indicators. 14.8% are limited in the interactive analysis of reported indicators, and 11.1% do not have the ability to quickly set up new reports.
First of all, improvement is needed for services of remote access to current business indicators and services for automatic notifications about their significant changes. Obviously, today it would be very convenient to have remote access to business data from mobile devices and, conversely, receive push notifications on these devices about major changes that require close attention.
It would be appropriate to recall here the forecast of the analytical company IDC, according to which, by 2022, almost two-thirds of employees in the United States will become mobile, that is, employees whose main working tool is a smartphone. In this sense – by analogy with a mobile bank and other services for clients in digital channels – the use of mobile technologies can give banking management a fundamentally new quality of work.
But for such a scenario to be realized in Russian banks, it is necessary not only to provide mobile access to management data, but, most importantly, to digitize the processes of data preparation and calculation of business indicators. And if you deploy a mobile analytics service quickly enough – in 2-3 weeks, then the digital immaturity of management processes can turn out to be a stumbling block. But if we manage to overcome it and the forced digital management transformations take place, it can become a revolution in banking management.